Feeling awake although sleep recordings indicate clear-cut sleep sometimes occurs in good sleepers and to an extreme degree in patients with so-called paradoxical insomnia. It is unknown what underlies sleep misperception, as standard polysomnographic (PSG) parameters are often normal in these cases. Here we asked whether regional changes in brain activity could account for the mismatch between objective and subjective total sleep times (TST). To set cutoffs and define the norm, we first evaluated sleep perception in a population-based sample, consisting of 2,092 individuals who underwent a full PSG at home and estimated TST the next day. We then compared participants with a low mismatch (normoestimators, n = 1,147, ±0.5 SD of mean) with those who severely underestimated (n = 52, <2.5th percentile) or overestimated TST (n = 53, >97.5th percentile). Compared with normoestimators, underestimators displayed higher electroencephalographic (EEG) activation (beta/delta power ratio) in both rapid eye movement (REM) and non-rapid eye movement (NREM) sleep, while overestimators showed lower EEG activation (significant in REM sleep). To spatially map these changes, we performed a second experiment, in which 24 healthy subjects and 10 insomnia patients underwent high-density sleep EEG recordings. Similarly to underestimators, patients displayed increased EEG activation during NREM sleep, which we localized to central-posterior brain areas. Our results indicate that a relative shift from low- to high-frequency spectral power in central-posterior brain regions, not readily apparent in conventional PSG parameters, is associated with underestimation of sleep duration. This challenges the concept of sleep misperception, and suggests that instead of misperceiving sleep, insomnia patients may correctly perceive subtle shifts toward wake-like brain activity.